On Wednesday, rumors began to swirl in Washington about a momentous policy shift: The White House will reportedly issue an executive order on Friday that would finally repeal state artificial intelligence laws, handing those regulatory powers to the federal government. The moment it leaked onto the Internet, lawyers and policymakers began reviewing every sentence. Much about it seemed politically unfeasible; there were even more that seemed exaggerated, possibly illegal. There were many agencies that were suddenly cut off.
But most importantly, they noticed how much power would be given to a certain South African tech billionaire turned special government employee who tunneled into the West Wing – not Elon Musk, but Other one.
In each part of the draft order, President Donald Trump directed his Cabinet secretaries and agency heads to immediately release reports and guidance within the next 90 days on how to penalize states that apply AI laws. In the case of the Attorney General, they had 30 days to establish an entire legal task force to sue these states. When carrying out the order, each of them would have to consult with David Sacks, a special advisor on artificial intelligence and cryptocurrencies and one of the most influential venture capitalists in the world.
“I don’t want to say it was a power grab. That’s too strong a word,” said a technology policy adviser close to the White House. “But it’s definitely kind of a consolidation of his power.”
The MAGA universe immediately exploded War room host Steve Bannon — who successfully thwarted a previous attempt to pass an AI moratorium in the Senate this year — devoted part of his Friday show to the draft regulation. In Congress, Democrats rebelled publicly; Technology-skeptical Republicans have been quietly preparing their statements. The AI policy world immediately published reports illustrating how much power it would suck into the hands of the White House. The order was supposed to be signed on Friday – but ultimately this did not happen.
Outside the White House, the AI executive order, if signed, would be legally unenforceable. But in the White House it would be treated as an imperial mandate. Historically, Trump’s executive orders are intended to force his subordinates to do his will immediatelylegality be damned, and the consequences will usually be irreversible until the courts find his actions illegal. For example, his tariff order may soon be overturned by the Supreme Court, but not before it will cause millions of dollars in economic losses and harm U.S. international relations.
When reached for comment, the White House press office email, run by Karoline Leavitt, declined to comment on this story, instead only persistently asking us to cite our sources.
From there it would be used as a threat against states. “I suspect that if it is effective, the most effective part of it will be to have a chilling effect on state legislatures,” said Charlie Bullock, a senior research fellow at the Law and Artificial Intelligence Institute Edge. One part of the bill would allow the government to withdraw any federal funds from states that violate the regulation — not just rural broadband subsidies that have been used as leverage in previous expropriation fights, but everything from highway funds to education subsidies. “If only [a state] can win the court case and force them to finally give them this funding, it would take a long time. Member States could convince this.”
This would, in one fell swoop, turn Sacks into a gatekeeper of US AI policy.
While several White House officials have ties to the tech industry, Sacks, who has transient government employee status, is seen by Washington insiders as Trump’s closest contact with CEOs of big-name tech companies who consider him an equal. (Although Vice President J.D. Vance worked in Silicon Valley before entering politics, he never broke into the three-comma club.)
“He’s trying to maintain America’s competitive advantage in the bigger picture, and you could say he’s trying to protect the tech industry in a more selfish way.” [with] more parochial, These are my people approach,” said a technology policy adviser close to the White House.
But Sacks also tried to neutralize a third, internal threat: political forces in the executive branch, on both the progressive left and the difficult MAGA right, that were eager to limit his influence at all costs.
Even in this hyper-partisan climate, the left and right share a common goal of regulating Massive Tech’s excesses, and will even publicly join forces to oppose them. And apparently it’s happening behind the scenes too. As a technology policy adviser described it, the informal internal alliance against Sacks consisted of remnants of the Democratic Biden administration “which over-regulated and wanted to break up tech companies” and far-right MAGA officials in his current administration “who distrust technology and similarly want to regulate tech companies – whether at the state or federal level – and bring them to their knees.”
According to those analyzing the draft act, it showed which entities were completely excluded.
The first step, noted by technology policy experts, was identifying who was excluded. In 2023, President Joe Biden’s massive AI executive order authorized a wide range of agencies to develop AI policy, and most – if not all – suddenly stopped working. For example, the National Institute of Standards and Technology (NIST) has been delegated research on artificial intelligence risk management, assessment, and standards development. (Incidentally, these concerns were recently written into California’s AI security law – a law that the AI industry has vehemently opposed). Also missing is any mention of the Office of Science and Technology Policy (OSTP), which centralizes the administration’s technology policy in one place before it is presented to the President; Cybersecurity and Infrastructure Security Agency (CISA), the DHS agency that deals with cyber threats to national security; or the Center for AI Standards and Innovation (CAISI), whose name speaks for itself.
“Perhaps in practice David Sacks will consult with them and [Office of Legislative Affairs] may be communicating with them,” said Riki Parikh, policy director of the bipartisan Alliance for Secure AI and a former Biden administration lawyer. “But what’s surprising is that we haven’t named them.”
Instead, the proposed moratorium would be implemented by four agencies: the Department of Justice, which would sue states in violation of the order; the Department of Commerce, which would analyze which states could lose broadband funding; the Federal Trade Commission, which would investigate which states would engage in “deceitful conduct” related to ideological bias; and the Federal Communications Commission, which would develop a federal standard for reporting artificial intelligence.
All of them, of course, would be advised by Sacks – and all of them now had the power to seek ways to punish states that created or enforced AI laws.
Populist Republicans, especially those from the MAGA base, immediately saw how much influence Sacks had on the entire order and how much that order would threaten every state. While they briefly allied with the tech right in seeking Trump’s election, Republicans have increasingly turned against their allies over a complete ideological mismatch: They believe artificial intelligence is a threat to conservative family values and will steal American jobs, they are allergic to federal encroachments on state sovereignty, and they generally despise how quickly tech CEOs have gone from supporting Democrats to supporting Trump. Several red states have started developing their own AI lawsand governors like Ron DeSantis of Florida and Sarah Huckabee Sanders of Arkansas have openly expressed their opposition to the moratorium. Even Trump’s open support for the moratorium did not sway this base.
“Purely from the point of view of political strategy, the basis of the Republican Party is not David Sacks and [fellow VC and Trump supporter] Marc Andreessen on this topic. They just aren’t,” said Brendan Steinhauser, a longtime Republican strategist and CEO of the bipartisan Alliance for Secure AI. “And I don’t think they care because they just think: It doesn’t matter to us. We are here to get what we want and there are three years left in this administration. We were Harris, Biden and Hillary supporters, and then we became Trump supporters because it was convenient.“
What the AI world didn’t expect was that MAGA would immediately try to crush them, even by joining forces with progressive anti-tech factions in the government, and that their aggressive approach to Silicon Valley via executive order would further widen the divide. However, this was enough to make them withdraw temporarily. The following week, a recent rumor spread around Washington that the administration would sign an AI executive order, and it did – but because a completely different, non-preventive, very uncontroversial project Instructing national laboratories to become more involved in the development of artificial intelligence.
The Special Advisor on Artificial Intelligence and Cryptocurrencies was mentioned only once.
Update, November 25: Added comment from the White House press office.